Government Workers

"Nice house on government pay."
--Mace Ryan (Rapid Fire)

As the current 'government shutdown,' which in reality affects only a small fraction of total federal government services and employees, continues, statists are predictably trotting out stories of furloughed workers who are missing paychecks and struggling to make ends meet. An underlying message is that these people are dependent on and entitled to these wages--as if they were working under contracts or similar employment agreements like those commonly made in the private sector.

However, the legitimacy of any wage agreement made by the federal government to transfer taxpayer funds--whether it be to workers or to suppliers--is questionable. Taxpayers surrender economic resources to the government under penalty of force. They are not willing principals using federal government agents to contract for them. Because the sources of the funds have not consented, contracts to pay government workers can be seen as invalid and breakable at any time.

Compounding the problem is the 'promise' to provide furloughed government workers back pay for all days missed once the shutdown ends. One can be confident that few taxpayers are on board with paying workers for services not rendered.

Politicians try to stave off taxpayer revolts by keeping tax rates below a politically expedient threshold--which historically appears to be about 20% at the federal level. But taxes collected at the politically expedient level are not enough to fund the federal payroll. As such, government borrows the difference to make payroll.

Thus, even if taxpayers do not revolt, the bogus federal employment agreements will ultimately be broken by economic forces. The debt and deficits necessary to fund the existing federal payroll, not to mention future spending increases, are not sustainable. Either the government defaults on its debt and payments cease, or the currency gets inflated away and debt (and government workers wages) get paid back in real pennies on the dollar.